NEW YORK - Few deny that the advent of non-proprietary analytical software programs during the past several years has paved the way for smaller participants in the CDO market by hastening the bid process with faster analytical turnaround. However, delegates questioned how level the playing field really is.

The established players still claim the advantage as they have been buying this collateral for years, and thus have the deals modeled, and in fact, own a lot of them. Even some players who rely on third-party vendors for some of their analysis acknowledge the weaknesses. "There are limitations. One risk is that they don't have fees and expenses or swaps in the deals modeled correctly, and so the cashflows are wrong," one source said. The proprietary systems are generally updated daily, another source noted, and so those types of mistakes are caught before they become a problem.

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